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Do I really need a Will?

Yes, many people die without a Will. And often things work out OK. But families often encounter unnecessary problems and unintended results.

When a person dies, assets fall into two categories. Assets owned with another person as joint tenants and assets with named beneficiaries pass to the designated persons. Assets titled in a trust pass to the trust beneficiaries. All other assets, owned in the sole name of the decedent, are probate assets. Probate is the legal process by which assets are transferred from the deceased person to those entitled to inherit. Probate occurs under the jurisdiction of the courts, either formal or informal probate.

A Will does not avoid probate; rather it directs what happens to the assets upon the completion of probate. Subject to certain restrictions intended to protect surviving spouses and minor children, and payment of valid expenses and taxes, a person may give assets in any shares to any persons, organizations or charities of choice. The Will also nominates the Personal Representative, a trusted individual or corporate fiduciary responsible to manage the assets and ensure the wishes of the decedent are followed.

If the decedent does not have a Will, state law determines who receives assets. In effect, the state provides a “Will” if you don’t have one. The laws of intestate succession differ from one state to another. Only Minnesota law is discussed here and only basic examples without covering all circumstances. The law refers to “descendants” who include children or issue of deceased children by right of representation, but for simplicity the term “children” is used in this article.

Contrary to common belief, a surviving spouse does not always receive all of the assets of the deceased spouse. The surviving spouse only receives a life estate in the homestead, and the decedent’s children receive a remainder interest. The surviving spouse therefore does not have the ability to sell or refinance the home without the children’s cooperation and sharing in the proceeds. If the children are minors, a court proceeding is required to appoint a legal conservator authorized to sign documents on behalf of the minor.

If either spouse has children who are not children of the other spouse, the surviving spouse receives the first $150,000 and one-half of any balance of assets other than the homestead, and the deceased person’s children receive the balance. This may be a serious concern when children are from more than one marriage.

If no spouse survives, assets pass to the decedent’s children (descendants by right of representation). If the children are minors, assets will be held under court order until age 18 years or further court order.

If the decedent had no spouse or descendants surviving, Minnesota law generally looks for the nearest class of relationship, starting with parents, siblings, grandparents and continuing through a complicated table of heirship. If no heirs exist, the assets pass to the State of Minnesota.

A simple Will avoids many problems and ensures that your wishes are followed. The selection of a personal representative is critical to minimize family conflict. You can express your values through gifts to charities. Provisions can be made for grandchildren’s college education. Items of tangible personal property with sentimental value can be given to desired persons. Wills may provide trusts to hold assets for minors, with trustees to manage assets and oversee use of the funds according to rules you establish. Assets may remain in trust, for example until the children reach a more mature age or to provide for a disabled child.

Having a basic estate plan is a gift to your family. Berg Law Offices, P.A. would be happy to assist you.